Thursday, 6 March 2014

How Barclay Perkins bought Style & Winch

The difficult times of the 1920's prompted many brewery takeovers. With many companies making minimal profits, some owners took little persuading to sell up. Buyers were firms looking to increase their number of tied houses and hence sales and market share.

Barclay Perkins belonged to the latter group. One of the breweries they snapped up was Style & Winch in Maidstone, Kent.

"Latest Brewery Combine. — It is now officially announced that Barclay Perkins & Company have made an offer for the shares of Style & Winch as follows:— 13s 9d cash and three Barclay Perkins shares for two Style & Winch shares. The new shares will rank for dividend as from January 1, 1929.
Dundee Courier - Tuesday 19 February 1929, page 2.

But in hard financial times, where did they find the money? Easy - they went to the Stock Exchange. They cleverly turned a disadvantage into an advantage. One if the problems of the brewing industry, especially after the rush to build tied estates at the end of the 19th century, was the large amount of capital tied up in property. A brewery with 1,000 pubs had millions of pounds just in their freeholds.

How to turn all the dead money into something useful? Use it as security for a loan. Which is exactly what Barclay Perkins did:

"Brewery Debenture.
The brewery trade can offer many sound opportunities for well-secured investment. The capital of brewery companies is largely locked up in properties which form good tangible security. Barclay Perkins & Co., Ltd., for instance, have outstanding £344,990 of an issue of £500,000 of Five Per Cent. Mortgage Debenture stock, which, in addition to being a floating charge, is specifically secured on certain freehold properties.

The stock stands to yield about 5.5 per cent., interest being payable on January 1 and July 1. It is down for redemption in 1977 at 102, but there is the option to redeem in or after 1937. Provision is also made for cumulative sinking fund at 0.5 per cent. to operate by purchase at or under par or at drawings at par.

Those who manage to secure an investment such as this are not usually willing to let it go, and when stock does come on the market it is worth snapping up.

The Latest Issue.
A better opportunity of obtaining a secured interest in Barclay Perkins & Co. is through the Five and a Half Per Cent. Mortgage Debenture stock, which was only issued in March last. This stock was not fully paid until the middle of April, and there is more likelihood that it has not yet reached permanent holders.

An amount of £500,000 was offered for sale, the money being required mainly to finance the purchase a controlling interest in Style & Winch. The security behind the stock is a first charge on freeholds, valued at £500,595 and £252,561 of leaseholds.

Redemption must be made by 1965, but may begin at 1940 at premium varying with the actual date. Interest is payable on April 1 and October 1, so that, although the last business was at 98, the price of issue, the inclusion of approximately three months' interest makes a purchase at the present price the better bargain."
Dundee Courier - Thursday 26 December 1929, page 2.

Here's Style & Winch's brewery from the air in 1921:

As you can see, it was a decent size.

After takeover, most purchased breweries were quickly shut down. In the majority of cases the buyer had no interest in the brewery, just the pubs it owned. That wasn't the case with Style & Winch. Not only did it remain open, it outlived Barclay Perkins Park Street brewery by a few years, finally closing in 1971*.

Barclay Perkins probably couldn't have supplied Style & Winch's pubs themselves because they were so many of them - 600**. I'm not sure how many houses Barclay Perkins had. A register of sales by pubs has 298 listed in 1921***. They must have owned many more than that.

You know what might be fun? Taking a look at the beers of Style & Winch. I'm sure I've got a few details somewhere.

4 comments:

Jeremy Drew
said...

Ron,

I must admit that I hadn't heard of Style and Winch, but I did find this potted history. It very much looks as if they expanded aggressively themselves in the period leading up to the takeover. Perhaps they took on too much.

"The Medway Brewery was built by William Baldwin in 1806. The company was known as "Baldwin and Holmes" in the 1850s, as ";Holmes and Style" during the 1860s and as "A F Style and Company" from 1880. It was amalgamated with E Winch and Sons Limited, of the Chatham Brewery, Chatham, Kent, and incorporated as "Style and Winch Limited" on the 17th March 1899.

that's quite interesting. There were a lot of takeovers in the first couple of decades of the 20th century. It seems because times were tough for breweries then and many ended up in financial difficulties.